Pfizer withdraws AstraZeneca bid

US drugs giant Pfizer today officially withdrew from its attempt to take over AstraZeneca after the UK-based group repeatedly spurned its advances.

Pfizer said in a statement: “On 18 May 2014, Pfizer announced that it had made a final proposal to AstraZeneca to make an offer to combine the two companies. Following the AstraZeneca board’s rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca.”

Ian Read, chairman and chief executive of Pfizer, said: “We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us.

“As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital.”

AstraZeneca last week rejected an improved final offer of £69 billion from Viagra maker Pfizer as at least £5 billion too low.

That was regarded as putting an end to weeks of intensifying rhetoric over a possible deal ahead of a deadline today, amid increasing concern over the impact of likely cost-cutting on UK jobs and the country’s science base.

The rejection met with discontent from some institutional shareholders, though others supported it.

The takeover attempt was formally launched by Pfizer at the end of last month, but hostility to the proposed deal included criticism in some quarters of plans for the newly-merged drugs giant to be redomiciled for tax purposes in the UK while retaining headquarters in New York.

Leif Johansson, chairman of AstraZeneca, said: “We note Pfizer’s confirmation that it no longer intends to make an offer for AstraZeneca.

“We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company.

“We are fully focused on the delivery of our strategy. We have attractive growth prospects and a rapidly progressing pipeline.

“In the coming months, we anticipate positive newsflow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business.”

He said the board was grateful to chief executive Pascal Soriot, his management team and to all the company’s employees for their dedication and focus over a period of uncertainty.

Mr Johansson said: “AstraZeneca has a culture of innovation, with science at the heart of everything we do.

“I believe this will create significant value for our shareholders, employees and patients who will benefit from our life-changing medicines.”

Tony Burke, assistant general secretary of the union Unite, said: “Pfizer failed to convince hardly anyone that their bid was good for science and would secure skilled jobs and manufacturing in the UK.

“There can be no room for complacency though. We expect that there will be renewed pressure on shareholders over the coming months with the likelihood that Pfizer could be back in its attempts to take over AstraZeneca.

“The Government needs to use this time to intervene and put a public interest test in place for proposed takeovers of this size, just as other governments do, such as the French, which has strengthened its powers to act to protect strategic industries.

“AstraZeneca’s workforce expects shareholders to stand firm, respect their responsibilities and back the board’s long-term strategy.

“The future of vital life sciences in the UK and improvements in health are so much more important than the desire of one company to minimise its tax liabilities and wrangles over drug patents.

“This is why we urge the Government to act responsibly and put in place a framework for a public interest test should Pfizer come back for AstraZeneca.”

Labour’s shadow business secretary Chuka Umunna said: “It is welcome that Pfizer has kept to its promise not to mount a hostile takeover of AstraZeneca, Britain’s second largest pharmaceutical company, following the rejection of its advances by the AstraZeneca Board.

“We were clear from the start that we would judge the proposed deal on whether it was best for British science, jobs and industry. We were not confident this was the case which was why we said the Government should subject the deal to a public interest test to determine whether it would have a material adverse impact on the UK’s science and R&D base and, if so, we argued it should be blocked.

“Where David Cameron and his government failed to act, the next Labour government will act to introduce a strengthened public interest test to better protect Britain’s science base in these exceptional cases.

“While Labour was standing up for British jobs and British science throughout this takeover bid, David Cameron and his ministers were cheerleading for it when one of the primary motivations behind the deal was financial engineering – cited by the AstraZeneca board as one of the execution risks justifying rejection of the bid.

“Britain has benefited enormously from inward investment. We must remain resolutely open for business as an attractive destination for investment – not as a global tax-avoidance wheeze – but because of the positive benefits Britain offers innovative companies and the benefits those companies can bring to the British people.”